The World Economic Forum recently released its Global Competitiveness Index (GCI) Report 2010-2011. Russia ranked 63 out of 139 nations – the same position it held in the previous year.
GCI in Review
According to the World Economic Forum:
- GCI is based on 12 pillars of competitiveness, providing a comprehensive picture of the competitiveness landscape in countries around the world at all stages of development:
- Institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation
- 13,500 business leaders were polled in 139 economies
Russia’s Position
The report explained that Russia’s unchanged position reflects that the “deterioration in macroeconomic stability has been somewhat balanced by improvements in other areas, notably infrastructure, health, and education, as well as technological readiness.”
Despite these positive spikes, the report indicates that Russia’s competitiveness continues to worsen in one of the major areas of concern: the efficiency of goods markets.
These inefficiencies in goods markets reduce the country’s ability to take advantage of some of its strengths, in particular its high innovation potential and its solid performance in terms of higher education and training. A particular challenge for Russia is related to its very weak institutions. Ranked 118 in this area, the country suffers from insufficient protection of property rights (126), undue influence (114), and weak corporate governance standards (119).
Reform Efforts
Although the report indicates the need for reform, the GCI does show improvements and higher scoring in areas where Russia has focused its modernization efforts. Russia ranks 8th on mobile phone subscribers and 38th for the country’s capacity for innovation. The government’s efforts in Skolkovo and the country’s growing media consumers present a trend that is in line with the president’s goals. To satisfy the number of mobile users, Russia recently unveiled its first domestically-made 4G smart phone.
In addition, last month’s Sochi Investment Forum produced 177 agreements to a value of 351 billion rubles. Capital investment also surged to its highest level in nearly two years in August, according to the State Statistics Service, as employment and consumer spending rose. Although scoring poorly on infrastructure, recent reports show that the market for the construction of roads, bridges and tunnels may grow at least 4 percent to 730 billion rubles ($23.5 billion) this year.
What experience do you have in any of the growing sectors reviewed by WEF’s Global Competitiveness Index?
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